China auto lobby, policymakers collide over foreign investment

February 21, 2014|Reuters

SHANGHAI, Feb 21 (Reuters) - China's auto lobby has urgedBeijing to support local carmakers after the regulator said itwas considering further opening up the market to outsideinvestment amid a deepening row between policymakers andstate-owned car firms.

China's auto lobby is opposed to plans that would relaxforeign ownership rules for China ventures, currently capped at50 percent.

"China should open the sector more to domestic investorsrather than foreign capital," Dong Yang, secretary general ofthe China Association of Automobile Manufacturers (CAAM), saidin a statement on CAAM's website, adding only car firms with asubstantial investment from China should be given the "greenlight".

Dong's comments came days after China's auto industryregulator said authorities plan to further open the country'sautomobile industry to foreign investors. Beijing hopes openingup will boost the competitiveness of Chinese partners throughabsorbing foreign technology and management expertise.

China's central government has made "fresh calls for moreopening" and relevant bodies are "studying the issue and willimplement it", Xiao Chunquan, a spokesman of the Ministry ofIndustry and Information Technology (MIIT), said this week.

The stance of CAAM, which has around 2,000 members includingChina's biggest automakers such as SAIC Motor Corp Ltd, FAW Group and Dongfeng, underscores wideningtension between the state auto industry and policymakers.